Just a reminder, the gov't doesn't have money to pay off current debts, much less new bills like student loans.

Student loans aren't so scary if you actually graduate and with a degree in something marketable. 50,000 in debt for a computer science or accounting degree from state college is a lot better deal than 100,000 in debt to private college for a history degree.

President Obama keeps pushing the (Warren) Buffett rule that nobody making more than $1 million a year should pay less than 30% in taxes. He'd do better by the economy if he adopted a Solyndra Rule, in which no company touting unproven and expensive technology should receive millions in taxpayer subsidies.

After the demise of Solyndra (with its $535 million loan guarantee) and Beacon Power ($43 million loan guarantee), last week saw the bankruptcy of Indiana-based lithium-ion battery maker Ener1. In 2009 an Ener1 subsidiary was awarded a grant worth up to $118 billion from the Energy Department, with Vice President Joe Biden touring and touting its factory a year ago.

Like Solyndra, Ener1 was a foolhardy bet for taxpayer cash. Founded in 2002, Ener1 had not turned a profit by the time of its grant and has proceeded to hemorrhage the $55 million of the DOE money it has received to date. Its losses in fiscal 2010 were $165 million.

The company has had to compete in a market with a glut of battery makers, all of which are selling into a lackluster electric-car market. This battery glut was created in substantial part by the Obama Administration, which handed out money to no fewer than 48 different battery technology and electric vehicle projects in 2009.

In the small favors department, defenders of the White House's green corporate welfare are noting that, unlike Solyndra, Ener1 is not closing its doors while in bankruptcy. Then again, Ener1 has created fewer than 400 of the 1,700 jobs it had promised by this year, and a successful restructuring is by no means assured.

Mr. Obama is undeterred. In last week's speech, he defended his taxpayer "investments" in private commercial companies, noting that "some technologies don't pan out, some companies fail." He would know. Though perhaps if Mr. Obama weren't throwing hundreds of millions down the green sinkhole, he wouldn't have to target the nation's real job creators for higher taxes to foot his losses.

Olson is a major heavyweight attorney, regularly arguing major cases in front of the Supreme Court.

By THEODORE B. OLSON How would you feel if aides to the president of the United States singled you out by name for attack, and if you were featured prominently in the president's re-election campaign as an enemy of the people?

What would you do if the White House engaged in derogatory speculative innuendo about the integrity of your tax returns? Suppose also that the president's surrogates and allies in the media regularly attacked you, sullied your reputation and questioned your integrity. On top of all of that, what if a leading member of the president's party in Congress demanded your appearance before a congressional committee this week so that you could be interrogated about the Keystone XL oil pipeline project in which you have repeatedly—and accurately—stated that you have no involvement?

Consider that all this is happening because you have been selected as an attractive political punching bag by the president's re-election team. This is precisely what has happened to Charles and David Koch, even though they are private citizens, and neither is a candidate for the president's or anyone else's office.

What Messrs. Koch do, in fact, is manage businesses that provide employment to more than 50,000 people in North America in legitimate, productive industries. They also give millions of dollars to medical researchers, hospitals and cultural institutions. Their biggest offense, apparently, is that they also contribute generously to nonprofit organizations that promote personal liberty and free enterprise, and some of those organizations oppose policies advocated by the president.

Richard Nixon maintained an"enemies list" that singled out private citizens for investigation and abuse by agencies of government, including the Internal Revenue Service. When that was revealed, the press and public were outraged. That conduct will forever remain one of the indelible stains on Nixon's presidency and legacy.

When Joseph McCarthy engaged in comparable bullying, oppression and slander from his powerful position in the Senate, he was censured by his colleagues and died in disgrace."McCarthyism," defined by Webster's as the "use of unfair investigative and accusatory methods to suppress opposition," will forever be synonymous with un-Americanism. Army counsel Joseph Welch's "Have you no sense of decency?" are words that evoke the McCarthy era and diminish the reputations of his colleagues who did nothing to stand up to him.

In this country, we regard the use of official power to oppress or intimidate private citizens as a despicable abuse of authority and entirely alien to our system of a government of laws. The architects of our Constitution meticulously erected a system of separated powers, and checks and balances, precisely in order to inhibit the exercise of tyrannical power by governmental officials.

Our Constitution even explicitly prohibits bills of attainder so that Congress may not single out individual citizens or groups for disfavored treatment or unequal application of the force of government. Prosecutorial power is rigidly constrained and judicially supervised so that government may not accuse private citizens of crimes or investigate them without good cause.

Whoever may be the victim of such abuse of governmental authority, the press and public almost invariably unify with indignation against it. If a journalist, labor-union leader or community organizer on the left can be targeted today, an academic or business person on the right can be the target tomorrow. If we fail to stand up against oppression from one direction, we abdicate the moral authority to challenge it when it comes from another.

This is why it is exceedingly important for all Americans to respond with outrage to what the president and his allies are doing to demonize and stigmatize David and Charles Koch. They have been the targets of the multiyear, carefully orchestrated campaign of vituperation and assault described above—and much more. It has been choreographed from the very top. When the president personally takes leadership, his political surrogates and army of allies in the press and Congress quickly and surely follow the direction and tone he sets.

The misuse of government power to damage or demean one's political enemies is abhorrent and the very antithesis of a free society and a government of laws, not men. It is time for the public to ask those engaged in these practices, "Have you no sense of decency?"

Mr. Olson, a lawyer in Washington, D.C., and a former solicitor general of the United States, represents Koch Industries.

Often we read what a "disappointment" Obama is. He had such "promise".

Are people who make these statements serious?

I don't get it.

Obama is EXACTLY what he represented himself to be. He was the MOST liberal Senator by voting record. He associated himself with radical left groups. He sat in a church for 2 decades while listening to a reverand who hates America, Jews, and whites.

What hope and change did these people think he was offering?

Indeed, the only (very modestly) refreshing aspect of his tenure is that he kept up the fight in Iraq and Afghanistan begun by W.Of course this was almost certainly for political reasons and not in sinc with what are obviously (by now) core beliefs.

If he does and barring some major economic turnaround, or wag the dog's tail trick like bombing Iran a week before election day (I wouldn't put it past him nor did I with Clinton) this guy will be back at Harvard pretending to be a Constitutional scholar.

CCP, Andrew, In my opinion, the Obama opponent will not need to pull against the economy nor will your inner thoughts on that do any good - or harm. The laws of economics are somewhat predictable, like laws of gravity.

We won't have an optimized economy while we have artificially high energy prices, an amazingly over-bloated regulatory scheme (mandating mercury in light bulbs?), marginal tax rates more than double what they need to be, or with the bureaucratic sector chewing up 40-50% of our productive resources.

A song and a dance even under Greek columns won't change the underlying fundamentals.

If the growth rate is 2.5% in November 2012, you can be sure that it should be about double that at that point in a recovery. If the unemployment rate dips under 8% (or U6 under 15%) you can be sure that it should be about half of that.

You will still need to execute a successful national campaign that involves persuasion in the face of obfuscation, no matter what the most recent headlines will say come November.

Clint Eastwood is receiving grief for his Super Bowl ad for Chrysler, which many saw as an Obama campaign ad trumpeting the president's Detroit bailout.

Mr. Eastwood's previously recorded remarks on the subject were: "We shouldn't be bailing out the banks and car companies."

A further complication is that Chrysler is now owned by Fiat, an Italian company, which received its stake largely as a gift of the U.S. taxpayer in return for meeting fuel-economy goals, not financial goals.

No political party would have let GM go under because of Lehman, and a column uninformed by political realism is uninteresting to read or write. But a decent bailout would have addressed the structural burdens that Congress, mostly for its own convenience, inflicted on the homegrown auto makers. That didn't happen.

If the U.S. president told the bank holding your mortgage to cancel your debt and hand you the house free, it wouldn't make you more productive or efficient. It just screwed someone you owed money to. And clearer than ever is that GM could have survived the Lehman episode with a simple bridge loan. America's biggest auto maker could have returned to the slog without dishonoring billions of dollars in obligations to bondholders and other creditors.

But the most egregious aspect of the Obama bailout is its annexation of the auto sector to the administration's green energy schemes. It's no exaggeration to say the auto industry is being used to fulfill a throwaway line in an Obama speech calling for one million electric vehicles on the road by 2015.

We've often noted the direct handouts, in the form of billions of dollars in subsidies to both manufacturers and buyers of green cars. But these are only half the story. Mr. Obama made a splash last year when he announced that, by 2025, the U.S. fleet would be required to get 54.5 miles per gallon.

The corollary of an implausible mandate is a steady traffic in auto industry lobbyists to Washington, campaign check in hand, to water it down. Of these, the most important are very large mileage credits awarded to electric cars (though they basically run on coal), and then the doubling of these credits as an "incentive multiplier." In effect, auto makers have been virtually required to build electric cars and dump them on the public at a loss in order to create headroom for the cars that actually earn a profit.

The latter, of course, are pickups in the case of U.S manufacturers. Lo, pickups have also been quietly showered with special breaks under the broad rule Mr. Obama announced.

Just ask Volkswagen and Daimler: Here we have almost a parody of public choice theory, which in raw form holds that whatever the stated purpose of government policy, it usually devolves into an excuse for politicians and bureaucrats to grant favors and extort tribute from special interests. The Germans are among the few willing to say publicly that CAFE has degenerated into a favor factory to protect Detroit's pickup franchise while giving Mr. Obama subsidized green cars to flaunt in a campaign ad. One measure of the absurdity: When the loopholes are factored in, a 54.5 miles-per-gallon standard has become a 40 mpg standard.

The coming Obama campaign will make a fuss over the Detroit bailout, helped by slenderly informed commentators who declare it an amazing success. Car sales are up 20% in two years, even if still below pre-crash levels. Detroit is adding shifts. GM, Ford and even Chrysler are reporting profits. Unmentioned in any Obama campaign ad, though, will be that today's modest sales boom is essentially a horsepower boom. SUVs and pickups are selling strongly. A run-of-the-mill Ford Fusion would have been a muscle car two decades ago. Detroit is bouncing back because it's selling cars the public wants to buy.

This, in fact, is a great way to run a car business, but will soon become all but impossible if Mr. Obama's new fuel-mileage rules are not further rolled back. Hence a glaring anomaly amid the happy talk: GM's stock price is still down 22% from its public reflotation a year ago.

As we noted last year, the auto industry's strategy for dealing with the administration that bailed it out has been to pray for the madness to pass. That the Lord has partly answered those prayers with pickup loopholes, and now talk of a mandatory "midterm review" of the mileage targets, was politically predictable. And yet a mystery remains.

No president in three decades has embraced fuel-economy regulation so fulsomely, and for good reason: Every study has found the rules to be costly, ineffectual and perverse. There is little evidence that Mr. Obama himself has ever given intelligent analysis to what he's doing or why. His one big speech advanced a perfectly silly claim that Detroit's troubles stem from building "bigger, faster" cars that the public manifestly wants and that earn Detroit most of its profits.

One explanation for the fuel-economy circus is that President Obama is content to be a point man for shibboleths. He takes for granted the wisdom of liberal policy clichés.

A more likely answer, we suspect, is to be found in public choice theory.

As for giving incentives and/or penalties to increase milage I'm not sure that is all bad.

I think everyone agrees that we need to conserve gas/oil.

I think everyone agrees that cars running on gasoline are a terrible cause of pollution.

Ergo, more electric cars or some form of alternative energy versus big gas guzzlers is good.

You can approach the the solution from different angles. For example, Japan has a very progressive expensive annual taxon engine size thereby giving an incentive? to purchase a smaller engine - saving gas. Further, their annual? smog checkis very strict; again, weeding out older cars and polluters. Also, it increases new car sales. Much of the money raised intaxes is poured into mass transit. As a country, I think they are better off.

Frankly, I don't see the need for a family of 4 or less to have a Suburban, but IF you want one, fine, but I see no problemtaxing the heck out of them. And if you still want one, fine....

A similar example is I had a friend who manufactured furniture here in LA. He employed over 3000 people. But fumes etc.from his factory polluted the air. Finally, the OASHA rules became so onerous that he packed his bags and moved his factory toMexico. We had dinner and I told him, "Sorry, but I'm glad it's gone; I don't want to breath that air.". He understood.For the greater good sometimes you have to make laws...

A similar example is I had a friend who manufactured furniture here in LA. He employed over 3000 people. But fumes etc.from his factory polluted the air. Finally, the OASHA rules became so onerous that he packed his bags and moved his factory toMexico. We had dinner and I told him, "Sorry, but I'm glad it's gone; I don't want to breath that air.". He understood.For the greater good sometimes you have to make laws...

So as long as it's Mexicans and not you, pollution is ok? Must be nice to be an entitled white liberal.

Frankly, I don't see the need for a family of 4 or less to have a Suburban, but IF you want one, fine, but I see no problemtaxing the heck out of them. And if you still want one, fine....

So it's ok to use the powers of taxation and law enforcement to penalize lifestyles you don't like? So if social conservatives want to use those powers to penalize homosexuals, that's ok too, right? The gay male lifestyle poses costs to the health care system, so we need to make that money back....

I'm not sure this year that the gay lifestyle will cost any more than the obese lifestyle of many straight Americans. For that matter I don't think the number of gays who don't have health insurance coverage and therefore increases costs to the public taxpayer is greater than straight Americans.

I like to drive fast, but law enforcement will penalize me. I'm told it's for the greater good and safety.

You mean exporting it to Mexico or China or the Navajo reservation. Hey, you're an enlightened white liberal, those poor people elsewhere need you to look out for them, so they're just breathing in those toxins that valuable people like you need to avoid, right?

Pope John Paul II, surveying from his seat in the eternal hereafter the battle between the American Catholic Church and the Obama administration over mandated contraception services, must be permitting himself a sad smile. The pope knew more than most about the innate tensions between the state and its citizens.

The Obamaites will object that it is unfair to liken their government to the Communist Party of Poland. That is not the point. What the former Karol Wojtyla knew is that any state will claim benevolence on behalf of doing whatever it thinks it needs to do in pursuit of its goals.

White House Press Secretary Jay Carney invoked the good in defense of the Obama law's universal reach: "The administration decided—the president agrees with this decision—that we need to provide these services that have enormous health benefits for American women and that the exemption that we carved out is appropriate."

The American Catholic Church, from left to right, is now being handed a lesson in the hierarchy of raw political authority. One hopes they and their supporters will recognize that they have not been singled out. The federal government's forcings routinely touch other groups in this country—schools, doctors, farmers, businesses. The church's fight is not the whole or the end of it.

Since he appeared, no other word has been invoked more often to describe Barack Obama's purposes than "transformative." Last year, Mr. Obama began to be criticized by some of his supporters for being insufficiently transformative while holding the powers of the presidency—this despite passing the biggest social entitlement since 1965, an $800 billion stimulus bill, raising federal spending to 24% of GDP and passing the Dodd-Frank restructuring of the U.S. financial industry. Naturally an interviewer this week asked Mr. Obama why he hadn't been more "transformative." The president replied that he deserved a second term, because "we're not done." In term two, it will be Uncle Sam, Transformer.

For many years, Catholic Charities U.S.A. has taken federal money to enlarge its budget. The people who run the Catholic Church, though not everyone in the pews, thought this was a good bargain. Here is the head of Catholic Charities, in 1997, describing the relationship: "We have been partners with government to help government do what it wants to do and what we believe it should do."

This 1997 statement was in response to criticism leveled at Catholic Charities back then by freshman U.S. Sen. Rick Santorum of Pennsylvania, who attacked the organization for its opposition to welfare-reform legislation. Mr. Santorum said welfare hurt rather than helped poor families.

Over decades, this deal with the federal government didn't change, even as Catholic bishops closed churches and parochial schools across the country for lack of funds. Here is Sr. Carol Keehan's statement when the House in 2009 passed the Obama health-care bill with only one Republican aye vote: "The Catholic Health Association applauds the U.S. House of Representatives and President Obama for enacting health care legislation that will bring security and health to millions of American families." Let the record show that the Catholic bishops opposed the legislation, fearing a conflict with the church's beliefs.

So here we are, with the government demanding that the church hold up its end of a Faustian bargain that was supposed to permit it to perform limitless acts of virtue. Instead, what the government believes the deal is about, more than anything else, is compliance.

Related Video Columnist Dan Henninger on the Catholic church and government...Politically bloodless liberals would respond that, net-net, government forcings do much social good despite breaking a few eggs, such as the Catholic Church's First Amendment sensibilities. That is one view. But the depth of anger among Catholics over this suggests they recognize more is at stake here than political results. They are right. The question raised by the Catholic Church's battle with ObamaCare is whether anyone can remain free of a U.S. government determined to do what it wants to do, at whatever cost.

Older Americans have sought for years to drop out of Medicare and contract for their own health insurance. They cannot without forfeiting their Social Security payments. They effectively are locked in. Nor can the poor escape Medicaid, even as the care it gives them degrades. Farmers, ranchers and loggers struggled for years to protect their livelihoods beneath uncompromising interpretations of federal environmental laws. They, too, had to comply. University athletic programs were ground up by the U.S. Education Department's rote, forced gender balancing of every sport offered.

With the transformers, it never stops. In September, the Obama Labor Department proposed rules to govern what work children can do on farms. After an outcry from rural communities over the realities of farm traditions, the department is now reconsidering a "parental exemption." Good luck to the farmers.

The Catholic Church has stumbled into the central battle of the 2012 presidential campaign: What are the limits to Barack Obama's transformative presidency? The Catholic left has just learned one answer: When Mr. Obama says, "Everyone plays by the same set of rules," it means they conform to his rules. What else could it mean?

Anyone who signs up for more of this deal by assuming that it will never force them to fall into line is getting what they deserve.

By JOHN H. COCHRANE When the administration affirmed last month that church-affiliated employers must buy health insurance that covers birth control, the outcry was instant. Critics complained that certain institutions should be exempt as a matter of religious freedom. Although the ruling was meant to be final, presidential advisers said this week that the administration might look for a compromise.

Critics are missing the larger point. Why should the Department of Health and Human Services (HHS) decree that any of us must pay for "insurance" that covers contraceptives?

I put "insurance" in quotes for a reason. Insurance is supposed to mean a contract, by which a company pays for large, unanticipated expenses in return for a premium: expenses like your house burning down, your car getting stolen or a big medical bill.

Insurance is a bad idea for small, regular and predictable expenses. There are good reasons that your car insurance company doesn't add $100 per year to your premium and then cover oil changes, and that your health insurance doesn't charge $50 more per year and cover toothpaste. You'd have to fill out mountains of paperwork, the oil-change and toothpaste markets would become much less competitive, and you'd end up spending more.

How did we get to this point? It all leads back to the elephant in the room: the tax deductibility of employer-provided group insurance.

If your employer pays you $100 less in salary and buys $100 of group insurance for you, you don't pay taxes on that amount. Hence, the more insurance costs and covers, the less in taxes you seem to pay. (Even that savings is an illusion: The government still needs money and raises overall tax rates to make up the difference.)

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CloseCorbis .To add insult to injury, this tax deduction does not apply to portable, guaranteed-renewable individual insurance. You don't get the tax break if your employer gives you the $100 and you buy a policy—a policy that will stay with you if you get sick, leave employment or get divorced. The pre-existing conditions crisis is largely a creature of tax law. You don't lose your car insurance when you change jobs.

Why did HHS add this birth-control insurance mandate—along with "well-woman visits, breast-feeding support and domestic-violence screening," and "all without charging a co-payment, co-insurance or a deductible"—to its implementation of a provision of the new health-care reform law? "Because it promotes maternal and child health by allowing women to space their pregnancies," says the HHS advisory panel. Because these "historic new guidelines" will make sure "women have access to a full range of recommended preventive services," says the original HHS announcement. To "increase access to important preventive services," echoes White House Press Secretary Jay Carney.

Notice the doublespeak confusion of "access" and "cost." I have "access" to toothpaste because I have two bucks in my pocket and a competitive supplier. Anyone who can afford a cell phone can afford pills or condoms.

Poor women who can't afford birth control are a red herring in this debate. HHS isn't limiting this mandate to the poor anyway. We all have to pay. The very poor typically don't have employer-provided health insurance in the first place. "Allowing women to space their pregnancies"? Was there some sort of federal ban on birth control before this?

It's not about "access" and it's not about "insurance." It's because Americans, when paying even modest co-payments, choose to spend their money on other things. They prefer a new iPod to a "wellness visit" to the doctor. As the HHS unwittingly admits: "Often because of cost, Americans used preventive services at about half the recommended rate."

Remember, we're supposed to be worrying about skyrocketing health-care expenses. Doubling the number of wellness visits and free pills sounds great, but who's going to pay for it? There is a liberal dream that by mandating coverage the government can make something free.

Sorry. Every increase in coverage means an increase in premiums. If your employer is paying for your health insurance, he could be paying you more in salary instead. Or, he could be lowering prices and selling his product to you and all consumers more cheaply. Someone is paying. Not even HHS tries to claim that these "recommended preventive services" will lower overall costs.

Here's a good mandate: Let's mandate that every time a government official says that the government is going to "help" some category of voter, he or she has to say who they are going to hurt in the same sentence. Because it has to be someone.

But what about the fact, you may ask, that unwanted children are a burden on society as well as to their mothers? Perhaps there is a social interest in subsidizing birth control? Perhaps there is—but if so, this is an awful way to do it.

Related Video Editorial board member Joe Rago on how HHS's contraception rules reflect the inherent problems with ObamaCare and government-mandated health care...The minute pills are "free," under insurance, the incentive for drug companies to come up with cheaper versions vanishes. So does their incentive to develop safer, more convenient, male-centered or nonprescription birth control. And by making pills free but not condoms, the government may inadvertently be contributing to an increase in sexually transmitted diseases.

The taxes and spending we argue about are the tip of the iceberg. Salting mandated health insurance with birth control is exactly the same as a tax—on employers, on Catholics, on gay men and women, on couples trying to have children and on the elderly—to subsidize one form of birth control.

If the government wants to subsidize birth control, OK, pass an explicit tax, and sensibly subsidize all birth control. And face the voters on it. The tax rate and spending debates that occupy the media are a small part of the effective taxes and spending that the government achieves by these regulatory mandates.

There is also the issue of religious freedom. Our nation is divided on social issues. The natural compromise is simple: Birth control, abortion and other contentious practices are permitted. But those who object don't have to pay for them. The federal takeover of medicine prevents us from reaching these natural compromises and needlessly divides our society.

The critics fell for a trap. By focusing on an exemption for church-related institutions, critics effectively admit that it is right for the rest of us to be subjected to this sort of mandate. They accept the horribly misnamed Patient Protection and Affordable Care Act, and they resign themselves to chipping away at its edges. No, we should throw it out, and fix the terrible distortions in the health-insurance and health-care markets.

Sure, churches should be exempt. We should all be exempt.

Mr. Cochrane is a professor of finance at the University of Chicago Booth School of Business and an adjunct scholar at the Cato Institute.

The Obamacare plaintiffs, I’ve noted here, have a point: a federal mandate to purchase health insurance raises enumerated powers problems of a sort that mere prohibitory regulations—“don’t do X”—do not. Today, let’s hear it for the feds.

With the exception of narrowly cabined “mandates” that ensure the operation of the federal government’s own institutions (such as juries and the armed forces), say plaintiffs, the federal government has never compelled performance as a condition of lawful residence in the United States. That’s a pretty potent argument. The government’s response is that a congressional failure to exercise a particular power doesn’t mean that Congress lacks that power. That’s technically true but substantively lame.

A much better answer is that the plaintiffs’ argument is in fact wrong. We are all familiar with an individual mandate that was authorized by the U.S. Congress and notoriously upheld by the U.S. Supreme Court: the affirmative duty of persons of Japanese descent to report to a Civil Control Station. Korematsu v. United States, 323 U.S. 214 (1943).

The distinction between mere prohibition and command played a large role in the internment cases. In an earlier case, Hirabayashi v. United States, 320 U.S. 81 (1943), plaintiff had been convicted on two counts: (1) failure to report of a Civil Control Station; (2) violation of an 8:00pm – 6:00am curfew. Chief Justice Stone’s opinion for the unanimous Court carefully addressed only the curfew violation, ostensibly on the grounds that the three-months prison terms for each violation were running concurrently. Technically, that left the constitutionality of the report-for-detention order up for grabs.

Strikingly, even the Korematsu Court sought to avoid that question. The military authorities had artfully issued concurrent orders excluding the plaintiff and others from the military area in question, while also prohibiting them from leaving that area; the only way to avoid punishment was to report to an assembly center. Seizing on the (plainly pretextual) formal distinction between the prohibitions and an affirmative command to report, the Court again declined to rule on the constitutionality of the mandate. Korematsu, 323 U.S. at 222. Justices Roberts and Jackson, in separate dissents, sharply criticized the majority and, insisting on the difference between the curfew and the detention regime, opined that the latter was a bridge too far.

Obviously, the racial classification in Hirabayashi and Korematsu has long been impermissible, and Mr. Korematsu’s conviction has been overturned, 584 F.Supp. 1406 (N.D. Cal. 1984). Moreover, Korematsu does not quite clinch the government’s case. Putting aside the Court’s technical evasion of the mandate issue, there was a war on at the time (a real war, not a Sebelius war over who pays for contraceptives), and it’s hard to contend with the logic that says that the power to wage war encompasses the power to wage it successfully. Still, Korematsu is a perfectly fine precedent: it has never been overruled. Moreover, it is the feds’ best and only precedent.

Thank you GM, great post IMO, WOW!. One of my both favorite and least favorite aspects of participating in the forum is being proven wrong. I hate being wrong but knowing it sooner rather than later helps keep my foot out of my mouth as much as possible as I go about my day. I have many times said and many times written that there is absolutely no precedent for anything like the individual mandate. Dead F-ing wrong. What could be more similar to the individual mandate than having you and your family rounded by your 'liberal' government for internment and more constitutional than having that particular law 'reviewed' by a Court packed by that same President. This is barely an inconvenience compared to that - hardly breaking new ground.

"So why don’t they cite [this law and this decision]?" Great question!!

Just like slaughtering your young, it is all "settled law". If we are going to 'successfully' wage a war against self insurance and market based economics, then it follows that it is 'constitutional' to use every government power necessary win that war! Instead of fining those who won't insure, maybe we ought to round them up for internment until the war is won.

i was also wrong about the right to an abortion being the only 'constitutional right' that we would want to be rare. Hardly anyone favors internment anymore for people who have done nothing wrong.

Announcing his support for Commissar Sebelius’s edicts on contraception, sterilization, and pharmacological abortion, that noted theologian the Most Reverend Al Sharpton explained: “If we are going to have a separation of church and state, we’re going to have a separation of church and state.”

Thanks for clarifying that. The church model the young American state wished to separate from was that of the British monarch, who remains to this day supreme governor of the Church of England. This convenient arrangement dates from the 1534 Act of Supremacy. The title of the law gives you the general upshot, but, just in case you’re a bit slow on the uptake, the text proclaims “the King’s Majesty justly and rightfully is and ought to be the supreme head of the Church of England.” That’s to say, the sovereign is “the only supreme head on earth of the Church” and he shall enjoy “all honors, dignities, pre-eminences, jurisdictions, privileges, authorities, immunities, profits, and commodities to the said dignity,” not to mention His Majesty “shall have full power and authority from time to time to visit, repress, redress, record, order, correct, restrain, and amend all such errors, heresies, abuses, offenses, contempts, and enormities, whatsoever they be.”

Welcome to Obamacare.

The president of the United States has decided to go Henry VIII on the Church’s medieval ass. Whatever religious institutions might profess to believe in the matter of “women’s health,” their pre-eminences, jurisdictions, privileges, authorities, and immunities are now subordinate to a one-and-only supreme head on earth determined to repress, redress, restrain, and amend their heresies. One wouldn’t wish to overextend the analogy: For one thing, the Catholic Church in America has been pathetically accommodating of Beltway bigwigs’ ravenous appetite for marital annulments in a way that Pope Clement VII was disinclined to be vis-à-vis the English king and Catherine of Aragon. But where’d all the pandering get them? In essence President Obama has embarked on the same usurpation of church authority as Henry VIII: As his Friday morning faux-compromise confirms, the continued existence of a “faith-based institution” depends on submission to the doctrinal supremacy of the state.

“We will soon learn,” wrote Albert Mohler of the Southern Baptist Theological Seminary, “just how much faith is left in faith-based institutions.” Kathleen Sebelius, Obama’s vicar on earth, has sportingly offered to maintain religious liberty for those institutions engaged in explicit religious instruction to a largely believing clientele. So we’re not talking about mandatory condom dispensers next to the pulpit at St. Pat’s — not yet. But that is not what it means to be a Christian: The mission of a Catholic hospital is to minister to the sick. When a guy shows up in Emergency bleeding all over the floor, the nurse does not first establish whether he is Episcopalian or Muslim; when an indigent is in line at the soup kitchen the volunteer does not pause the ladle until she has determined whether he is a card-carrying papist. The government has redefined religion as equivalent to your Sunday best: You can take it out for an hour to go to church, but you gotta mothball it in the closet the rest of the week. So Catholic institutions cannot comply with Commissar Sebelius and still be in any meaningful sense Catholic.

If you’re an atheist or one of America’s ever more lapsed Catholics, you’re probably shrugging: What’s the big deal? But the new Act of Supremacy doesn’t stop with religious institutions. As Anthony Picarello, general counsel for the U.S. Conference of Catholic Bishops, put it: “If I quit this job and opened a Taco Bell, I’d be covered by this mandate.” And so would any of his burrito boys who object to being forced to make “health care” arrangements at odds with their conscience.

None of this should come as a surprise. As Philip Klein pointed out in the American Spectator two years ago, the Obamacare bill contained 700 references to the secretary “shall,” another 200 to the secretary “may,” and 139 to the secretary “determines.” So the secretary may and shall determine pretty much anything she wants, as the Obamaphile rubes among the Catholic hierarchy are belatedly discovering. His Majesty King Barack “shall have full power and authority to visit, repress, redress, record, order, correct, restrain, and amend all such errors, heresies, abuses, offenses, contempts, and enormities whatsoever they be.” In my latest book, I cite my personal favorite among the epic sweep of Commissar Sebelius’s jurisdictional authority:

Before Obama’s Act of Supremacy did the English language ever have need for such a phrase? “Tooth-level surveillance”: from the Declaration of Independence to dentured servitude in a mere quarter-millennium.

Henry VIII lacked the technological wherewithal to conduct tooth-level surveillance. In my friskier days, I dated a girl from an eminent English Catholic family whose ancestral home, like many of the period, had a priest’s hiding hole built into the wall behind an upstairs fireplace. These were a last desperate refuge for clerics who declined to subordinate their conscience to state authority. In my time, we liked to go in there and make out. Bit of a squeeze, but it all adds to the fun — as long as you don’t have to spend weeks, months, and years back there. In an age of tooth-level surveillance, tyranny is subtler, incremental but eminently enforceable: regulatory penalties, denial of licenses, frozen bank accounts. Will the Church muster the will to resist? Or (as Archbishop Dolan’s pitifully naïve remarks suggest) will this merely be one more faint bleat lost in what Matthew Arnold called the “melancholy, long, withdrawing roar” of the Sea of Faith?

In England, those who dissented from the strictures of the state church came to be known as Nonconformists. That’s a good way of looking at it: The English Parliament passed various “Acts of Uniformity.” Why? Because they could. Obamacare, which governmentalizes one-sixth of the U.S. economy and micro-regulates both body and conscience, is the ultimate Act of Uniformity. Is there anyone who needs contraception who can’t get it? Taxpayers give half a billion dollars to Planned Parenthood, who shovel out IUDs like aspirin. Colleges hand out free condoms, and the Washington Post quotes middle-aged student “T Squalls, 30” approving his university’s decision to upgrade to the Trojan “super-size Magnum.”

But there’s still one or two Nonconformists out there, and they have to be forced into ideological compliance. “Maybe the Founders were wrong to guarantee free exercise of religion in the First Amendment,” Melinda Henneberger of the Washington Post offered to Chris Matthews on MSNBC. At the National Press Club, young Catholics argued that the overwhelming majority of their coreligionists disregard the Church’s teachings on contraception, so let’s bring the vox Dei into alignment with the vox populi. Get with the program, get with the Act of Uniformity.

The bigger the Big Government, the smaller everything else: First, other pillars of civil society are crowded out of the public space; then, the individual gets crowded out, even in his most private, tooth-level space. President Obama, Commissar Sebelius, and many others believe in one-size-fits-all national government — uniformity, conformity, supremacy from Maine to Hawaii, for all but favored cronies. It is a doomed experiment — and on the morning after it will take a lot more than a morning-after pill to make it all go away.

Brief • February 13, 2012 The Foundation"Believing with you that religion is a matter which lies solely between man and his God, that he owes account to none other for his faith or his worship, that the legislative powers of government reach actions only, and not opinions, I contemplate with sovereign reverence that act of the whole American people which declared that their legislature should 'make no law respecting an establishment of religion, or prohibiting the free exercise thereof,' thus building a wall of separation between church and State." --Thomas Jefferson, letter to a Committee of the Danbury Baptist Association, 1802For the Record

We're not buying what the president's selling"t would be a mockery of the Free Exercise Clause of the First Amendment if, for example, the Catholic Church were required by law to freely provide such 'health care services' ... as contraception, sterilization and pharmacological abortion -- to which Catholicism is doctrinally opposed as a grave contravention of its teachings about the sanctity of life. Ah. But there would be no such Free Exercise violation if the institutions so mandated are deemed, by regulatory fiat, not religious. And thus, the word came forth from [Health and Human Services Secretary Kathleen] Sebelius decreeing the exact criteria required.... Criterion 1: A 'religious institution' must have 'the inculcation of religious values as its purpose.' But that's not the purpose of Catholic charities; it's to give succor to the poor. That's not the purpose of Catholic hospitals; it's to give succor to the sick. Therefore, they don't qualify as 'religious' -- and therefore can be required, among other things, to provide free morning-after abortifacients. Criterion 2: Any exempt institution must be one that 'primarily employs' and 'primarily serves persons who share its religious tenets.' Catholic soup kitchens do not demand religious IDs from either the hungry they feed or the custodians they employ. Catholic charities and hospitals -- even Catholic schools -- do not turn away Hindu or Jew. Their vocation is universal, precisely the kind of universal love-thy-neighbor vocation that is the very definition of religiosity as celebrated by the Gospel of Obama. ... The contradiction is glaring, the hypocrisy breathtaking. But that's not why Obama offered a hasty compromise on Friday. It's because the firestorm of protest was becoming a threat to his re-election. Sure, health care, good works and religion are important. But re-election is divine." --columnist Charles Krauthammer

Must give Crafty credit for recognizing that the administrations assault on Catholic teachings is not a Catholics-only issue. it is not a birth control method question, it is not a religious issue. It is a limited government issue.

Luckily for us we have a firewall called the constitution to stop any encroachments by the government on our liberties and we have 9 justices sworn to make sure that can never happen. (Why does that sound like sarcasm in 2012?)

The Obama Administration is claiming vindication after Friday's release of its "independent review" of the Department of Energy's loan program. May we also sell you some Solyndra shares?

Looking to outflank a Congressional investigation, the White House last October retained banker and former Treasury official Herb Allison to review the loan program that had dispensed $535 million to Solyndra, a failed solar panel maker under investigation by the FBI.

It seems the White House's idea of an review is a highly technical and uninformative snapshot of the financial status of the Energy Department's existing loan portfolio. Mr. Allison examined 30 loans and loan guarantees that the Obama Administration has awarded to green-energy companies, worth $24 billion. The bulk of the report explains the complex methodologies Mr. Allison used to assign credit ratings to broad groups of these government "investments." It's not a page-turner.

This narrow approach suits the White House, especially Mr. Allison's finding that at current market conditions taxpayers could lose only $2.7 billion on the loans. Since this is $200 million less than Energy's own estimate, and some $7 billion less than what Congress was required by financial rules to set aside for blow-ups, the White House has declared victory.

Only in Washington is $2.7 billion in losses considered performing "well." But the bigger problem is that the Allison report addresses none of the main issues. Because Mr. Allison's brief was to examine only current loans, the report failed to investigate the bankruptcies of Solyndra or Beacon Power, an energy-storage company. So apart from its biggest failures, the program is a success.

Mr. Allison also didn't investigate whether political influence was brought to bear on behalf of certain loans, a major question in the Solyndra case. His report doesn't examine if government dollars have distorted the energy marketplace, and it doesn't judge whether government assistance is even needed given private venture capital and corporate dollars. Mr. Allison's remit was to don the green eyeshades.

But even by that standard he may be wrong. Because the green-energy industry depends so heavily on subsidies and unproven technology, a company that is surviving today may be in trouble next year. Ask Solyndra.

Because of privacy concerns, Mr. Allison didn't release his credit ratings for individual loan recipients. Instead, he gave ratings for categories of loans, such as those that went to companies producing power for utilities. The report provides zero information about which borrowers are in trouble.

Mr. Allison concludes with a call for more transparency and a new "chief risk officer" to monitor the program. But what were the Administration's current bureaucrats doing if not assessing risk? Congress's Solyndra investigation has found that these risk assessors were pushed by the White House to quickly sign off on the loan, so that Vice President Joe Biden could announce a sexy green project.

Politics will trump economics in government handouts because they are made for political reasons. Taxpayers still deserve a genuine probe, and Congress should keep digging into green corporate welfare.

Fairly long article and I don't think it is fair to summarize. If you are interested, read it start to finish. Many examples of buying in, advancing the public argument to have ntaxpayer money follow his to bolster his position, and profit to no end. This is the opposite of a free market, opposite of equal protection under the law, and proves false the perception that big investment, big business, big banks, big favoritism is a uniquelyRepublican phenomenon. This guy is a big liberal with no apologies.

There is nothing conservative (or constitutional) about government favoring one business over another.

By KARL ROVE Former British Prime Minister Margaret Thatcher once said that the problem with socialism is that eventually you "run out of other people's money." And it's not just tax dollars she was talking about, as the Obama presidency has shown.

Take the decision to force Catholic institutions to provide health-insurance coverage for sterilization, contraception and abortion-inducing drugs. When this decision caused an outcry, Mr. Obama offered the following compromise: Insurance companies will be ordered to provide such coverage "free" to employees of Catholic churches and organizations.

But of course, this coverage won't be free. Insurance companies will pass the cost on to policyholders, including those same Catholic institutions. In short, Other People's Money will be used.

Another example: To appear empathetic about housing foreclosures, the Obama administration pressured five banks to cough up $25 billion—$3 billion to the federal and state governments, and nearly $22 billion for payments to people foreclosed upon and to reduce the principal of mortgages with balances greater than the home's current value.

This will bail out no more than 10% of homeowners whose mortgages are underwater, according to an estimate by Chris Papagianis of the nonpartisan policy-research institute e21, who notes there is roughly $700 billion in residential negative equity across the country.

But the political optics are good—the banks can be tarred because of their paperwork foul-ups—and the $25 billion isn't from the federal budget. This also constitutes a use of Other People's Money, paid by all bank customers through bigger fees and higher interest rates.

Similarly, when Mr. Obama set up a Consumer Financial Protection Bureau in 2010 to make sure people are treated fairly, he wanted to hide the new bureaucracy's cost and limit congressional budget oversight. So he gave it an automatic draw on the Federal Reserve's balance sheet. Now the massive new financial regulatory agency will take money collected from every bank and institution (and, in turn, their customers) that does business with the Fed.

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CloseReuters .This tactic should no longer surprise anyone. Consider the provision in the president's health-care law that prohibits insurers from charging younger, healthier policyholders substantially less than older, less healthy policyholders. The upshot: Healthy 30-year-olds who go to the gym pay higher prices for health insurance than they should, thereby subsidizing the insurance of older policyholders who drink and smoke. The subsidies are all "free"!

Candidate Obama promised to cut taxes for 95% of Americans. But according to the Tax Policy Center, some 76 million Americans who file income-tax returns, or 46.4% of the total, won't pay any taxes. No problem. Through 2018, according to the congressional Joint Committee on Taxation, the administration's "Making Work Pay" program—if it is made permanent—would take $640 billion from people who do pay income taxes and give to those who don't in the form of a refundable tax credit.

In other words, the government will cut them a check. That was once called "welfare." Using Other People's Money allows Mr. Obama to call it "tax cuts."

Mr. Obama used taxpayer dollars for most of his auto industry bailout—with $37 billion still outstanding, most of which is probably lost forever. Even then, he still needed Other People's Money. About $20 billion was taken from bondholders and given to the United Auto Workers, which ended up owning a slug of GM and Chrysler. Fairness, at least to the president's union supporters.

Fannie Mae and Freddie Mac, those two failed government-sponsored enterprises, will cost taxpayers as much as $333 billion—according to the Congressional Budget Office—as Mr. Obama gave them an unlimited draw on the Treasury. Everyone whose mortgage isn't securitized by Fannie or Freddie ends up paying higher interest rates and larger fees as a result.

Government spends taxpayer dollars and liberals want to spend more of them. But what sets Mr. Obama apart—what places him in a category of one—is how eager he is to find ways outside the normal appropriations process to fund his schemes in the name of fairness, or to make them appear free.

For Mr. Obama, helping political supporters and those he believes deserving, while shifting the costs onto those he considers undeserving, may be jolly good fun. But the question is how deep of a hole he'll leave all of us to dig out of when he vacates the Oval Office.

Mr. Rove, the former senior adviser and deputy chief of staff to President George W. Bush, is the author of "Courage and Consequence" (Threshold Editions, 2010).

Rove is right on this. It is all targeted politically as other people's money. They had it all planned out many times over how they were going to spend the money from letting the Bush tax cuts expire - raising rates only on the rich.

Pres. Obama includes himself as among the 'fortunate' who can afford to pay more, partly to brag, but he never took a risk that involved employing people or even held a full-time private sector job. He wasn't fortunate (lucky), he was clever, leveraging his public fame into personal wealth.

They don't target the rich because they can afford to pay more. They pretend to target the rich to make the lower 98% think that their recklessness won't affect them.

Rich with other peoples' money means entitled to staff - up to the point where they don't even know how many they have. The first lady denies the Glen Beck claim that she has 43 staff. She says (through a staff person) that it is closer to 25. http://www.politifact.com/truth-o-meter/statements/2011/mar/04/glenn-beck/glenn-beck-says-first-lady-michelle-obama-has-43-h/ If this is a math problem, 33 is closer to 25 than to 43, not counting staff that are not called staff and not counting the ones hired since. She has had 3 chiefs of staff, "The turnover, greater than under recent first ladies, underscores the pressure and high expectations of working in an operation known for its polish and discipline" [with other peoples money]. http://www.politico.com/news/stories/0511/55832.html#ixzz1mbNmWVEt

Have you seen the official White House version of what the New York Times headline writers call "A Responsible Budget"? My favorite bit is Chart 5-1 on Page 58 of their 500-page appendix on "Analytical Perspectives." This is entitled "Publicly Held Debt Under 2013 Budget Policy Projections."

As shown above, it's a straight line going straight up before disappearing off the top right-hand corner of the graph in the year 2084 and continuing northeast straight through your eye socket, out the back of your skull and zooming up to rendezvous with Newt's space colony on the moon circa 2100.

Just to emphasize, this isn't the doom-laden dystopian fancy of a right-wing apocalyptic loon like me; it's the official Oval Office version of where America's headed.

In the New York Times-approved "responsible budget" there is no attempt even to pretend to bend the debt curve into something approaching re-entry with reality.

As for us doom-mongers, at the House Budget Committee last Thursday, Chairman Paul Ryan produced another chart, this time from the Congressional Budget Office, with an even steeper straight line showing debt rising to 900% of GDP and rocketing off the graph circa 2075.

America's Treasury Secretary, Timmy Geithner the TurboTax Kid, thought the chart would have been even more hilarious if they'd run the numbers into the next millennium: "You could have taken it out to 3,000 or to 4,000" he chortled, to supportive titters from his aides.

Has total societal collapse ever been such a nonstop laugh riot?

"Yeah, right." replied Ryan. "We cut it off at the end of the century because the economy, according to the CBO, shuts down in 2027 on this path."

The U.S. economy shuts down in 2027? Had you heard about that? It's like the ultimate President's Day Sale: Everything must go — literally!

At such a moment, it may seem odd to find the political class embroiled in a bitter argument about the Obama administration's determination to force Catholic institutions (and, indeed, my company and your company, if you're foolish enough still to be in business in the United States) to provide free prophylactics to its employees.

The received wisdom among media cynics is that Obama has engaged in an ingenious bit of misdirection by seizing on a pop-culture caricature of Republicans and inviting them to live up to it: Those uptight squares with the hang-ups about fornication have decided to force you to lead the same cheerless sex lives as them.

I notice that in their coverage NPR and the evening news shows generally refer to the controversy as being about "contraception," discreetly avoiding mention of sterilization and pharmacological abortion, as if the GOP have finally jumped the shark in order to prevent you jumping anything at all.

It may well be that the Democrats succeed in establishing this narrative. But anyone who falls for it is a sap. In fact, these two issues — the Obama condoms-for-clunkers giveaway and a debt-to-GDP ratio of 900% by 2075 — are not unconnected.

In Greece, 100 grandparents have 42 grandchildren — i.e., an upside-down family tree. As I wrote in this space a few weeks ago, "If 100 geezers run up a bazillion dollars' worth of debt, is it likely that 42 youngsters will ever be able to pay it off?"

Most analysts know the answer to that question: Greece is demographically insolvent. So it's looking to Germany to continue bankrolling its First World lifestyle.

But the Germans are also demographically exhausted: They have the highest proportion of childless women in Europe. One in three fraulein have checked out of the motherhood business entirely.

A nation that did without having kids of its own is in no mood to maintain Greece as the ingrate slacker who never moves out of the house.

As the European debt crisis staggers on, these two countries loathe each other ever more nakedly: The Greek president brings up his war record against the German bullies, and Athenian commentators warn of the new Fourth Reich.

The Germans, for their part, would rather cut the Greeks loose. In a post-prosperity West, social solidarity — i.e., socio-economic fictions such as "Europe" — are the first to disappear.

The United States faces a mildly less-daunting arithmetic.

Nevertheless, the Baby Boomers did not have enough children to maintain mid-20th century social programs. As a result, the children they did have will end their lives in a poorer, uglier, sicker, more divided and more violent society.

How to avert this fate? In 2009 Nancy Pelosi called for free contraceptives as a form of economic stimulus.

Ten thousand Americans retire every day, and leave insufficient progeny to pick up the slack. In effect, Nancy has rolled a giant condom over the entire American economy.

Testifying before Congress, Timmy Geithner referred only to "demographic challenges" — an oblique allusion to the fact that the U.S. economy is about to be terminally clobbered by 100 trillion dollars of entitlement obligations it can never meet.

And, as Chart 5-1 on page 58 of the official Obama budget "Analytical Perspectives" makes plain, your feckless, decadent rulers have no plans to do anything about it.

Instead, the Democrats shriek, ooh, Republican prudes who can't get any action want to shut down your sex life! According to CBO projections, by midcentury mere interest payments on the debt will exceed federal revenues.

For purposes of comparison, by 1788 Louis XVI's government in France was spending a mere 60% of revenues on debt service, and we know how that worked out for His Majesty shortly thereafter.

Not to worry, says Barry Antoinette. Let them eat condoms.

This is a very curious priority for a dying republic. "Birth control" is accessible, indeed ubiquitous, and, by comparison with anything from a gallon of gas to basic cable, one of the cheapest expenses in the average budget. Not even Rick Santorum, that notorious scourge of the sexually liberated, wishes to restrain the individual right to contraception.

But where is the compelling societal interest in the state prioritizing and subsidizing it? Especially when you're already the Brokest Nation in History. Elsewhere around the developed world, prudent politicians are advocating natalist policies designed to restock their empty maternity wards.

A few years ago, announcing tax incentives for three-child families, Peter Costello, formerly Geithner's counterpart Down Under, put it this way: "Have one for Mum, one for Dad, and one for Australia."

But in America an oblivious political class, led by a president who characterizes young motherhood as a "punishment," prefers to offer solutions to problems that don't exist rather than the ones that are all too real.

I think this is what they call handing out condoms on the Titanic.

Glenn Reynolds, the Instapundit, distills the current hysteria thus: "It's as if we passed a law requiring mosques to sell bacon and then, when people objected, responded by saying 'What's wrong with bacon? You're trying to ban bacon!!!!'"

Americans foolish enough to fall for the Democrats' crude bit of misdirection can hardly complain about their rendezvous with the sharp end of that page 58 budget graph.

People are free to buy bacon, and free to buy condoms. But the state has no compelling interest to force either down your throat.

The notion that an all-powerful government would distract from its looming bankruptcy by introducing a universal contraceptive mandate would strike most novelists as almost too pat in its symbolism.

It's like something out of "Brave New World." Except that it's cowardly, and, like so much else about the sexual revolution, very old and wrinkled.

Two news stories from this week underscored the most important development in Democratic party politics in the last thirty years. First, from the Washington Free Beacon:

Politico Influence reports that House minority leader Nancy Pelosi and minority whip Steny Hoyer raised $400,000 last night at a fundraiser held at the home of Democratic lobbyists Heather and Tony Podesta. Heather Podesta runs the firm Heather Podesta and Partners.

Heather Podesta’s clients include liberal bogeymen such as the for-profit education industry and Brookfield Asset Management, the real-estate company that owns Zuccotti Park in lower Manhattan and which ultimately gave the NYPD the green light to evict the Occupy Wall Street movement from its grounds in November 2011. Pelosi is a vocal supporter of the occupiers, having once said, “God bless them.”

Second, from Bloomberg:

President Barack Obama returns to New York on March 1 for his first campaign fundraiser with investment bankers and hedge fund managers since asking Congress in his 2013 budget to increase taxes on the wealthy.

The president’s hosts include Ralph Schlosstein, chief executive officer at Evercore Partners Inc. (EVR), and his wife, Jane Hartley, co-founder of the economic and political advisory firm Observatory Group LLC, who were assured last week by Jim Messina, Obama’s campaign manager, that the president won’t demonize Wall Streetin his re-election pursuit.

The $35,800-per-person dinner at ABC Kitchen, the first of the evening’s four fundraising events, is being hosted by many of Obama’s top Wall Street donors, according to a person familiar with the matter. Sponsors include Blair W. Effron, partner and co-founder of Centerview Partners LLP; Marc Lasry, managing partner and founder of Avenue Capital Group; Mark Gallogly, a managing principal of Centerbridge Partners; James Rubin, managing director of BC Partners; Robert Wolf, UBS AG’s chairman for the Americas; and Antonio Weiss, global head of investment banking at Lazard Ltd.

The Democratic party used to be the party opposed to big business. Andrew Jackson was reviled by business elites, and William Jennings Bryan scared the living daylights out of them. Neither of those men would be caught dead asking for money from such lobbyists and bankers, who would never give them a dime, anyway!

But that is obviously no longer true. What we have instead is a party whose leaders simultaneously press the case for “fairness” while giving unfair access to wealthy donors such as these. And that has basically been the way of the world for the last 30 years; since the mid-1980s, the Democrats in Congress have usually matched or exceeded the GOP in terms of contributions from business and professional PACs.

Why has this happened? It has to do with the two sided nature of the modern Democratic party. On the one hand, the party promotes progressivism as its public-spirited governing philosophy. This is the ideology that animates the pages of The New Republic, The Nation, and well-intentioned liberals everywhere: The idea that a powerful central government can bring about social justice and true equality. But there is another side of the coin, less commented upon and much less noble: The Democratic party is also a massive patronage operation that uses the vast regulatory and redistributive powers of the federal government to attract and maintain political clients, whose loyalty stems not simply from the party’s public-spirited philosophy but also the special benefits they enjoy for being coalition members.

This is why politicians in the liberal party do so many illiberal things. Railing against “millionaires and billionaires” on one day then ponying up to them, hat in hand, on the other is one such example. Another is preening about the undue influence of the pharmaceutical industry during the 2008 campaign, and then giving them a sweetheart deal in Obamacare.

And let’s be clear, those “millionaires and billionaires” are getting something for their campaign contributions. Consider, for instance, this great article by Peter Schweizer in Reason about Warren Buffett. He’s now the Democratic party’s number one talking point in pushing for equality. It isn’t fair that he gets taxed at such a lower rate than his secretary. He doesn’t need the money! But Schweizer demonstrates that Buffett has in fact made a killing off his access to the higher-ups in the Democratic party. A modest increase in his tax rate is a small price to pay for the ability to influence public policy.

And he is no exception. As Charles Gasparino argues about the Dodd-Frank regulations:

The trade-off for all this regulation is government protection, which is what makes the crony capitalism of the modern banking business really work . . . mplicit in just about every facet of the bill was that “too big to fail”—the notion that Citigroup, Bank of America, Goldman Sachs, J.P. Morgan, and Morgan Stanley are so large and intertwined in the global economy that they need to be monitored and propped up no matter how much money they lose—was here to stay.

This signals the core problem of the Democratic party: It has become the opposite of what its founders intended it to be, and indeed opposite of what it claims to be today. The party presents itself as the party of the people against the powerful, of political and economic equality for all, of true social justice. But the reality is that the party now offers special benefits, sometimes amounting to billions of taxpayer dollars, for those who contribute to its political success.

Last week I compared the modern party to Tammany Hall, and its coziness with Wall Street is probably the most striking example of the parallel between the two. Tammany didn't win elections merely through the support of the Irish, but also by keeping its financial sponsors on Wall Street happy. So, year after year, Tammany pols would enorse the Democratic party platform, which inevitably railed against the GOP's coziness with special interests, while they themselves were cozy with those very same interests. That is the modern Democratic party in a nutshell.

President Obama appeared at a United Auto Workers tent revival meeting Tuesday, and he made several notable claims. Critics of the Detroit bailout of 2008-09 are motivated, apparently, by their antipathy to American workers. The alternative to a government rescue was letting the entire auto industry "die." But one particular claim stood out. Mr. Obama said the bailouts succeeded not "because of anything the government did."

The lacuna in this account is the $81.8 billion that taxpayers surrendered to General Motors and Chrysler, and we detailed the many other costs in a February 25 editorial "Halftime in Detroit." As it happens, however, we missed one big thing the government did that deserves more attention: GM's tax gift courtesy of the U.S. Treasury.

Corporations in the red, as GM was for years, are allowed to carry forward net operating losses that reduce their future tax liability when they are making money. GM had accumulated about $45 billion in such profit-shielding chits by 2008, with a book value of about $18 billion. When companies enter bankruptcy, carry-forwards disappear or are greatly limited under IRS section 382, which kicks in when ownership changes by more than 50 percentage points.

The point is to prevent companies from buying assets solely for tax arbitrage or tax avoidance. But starting in 2009, Treasury began to issue regulatory "notices" that suspend this law when it comes to Treasury-owned stock. The provisions also apply to AIG and Citigroup.

So when GM entered bankruptcy in June 2009, the government swapped the debt the auto maker owed it as a creditor for 61% of "new GM," while handing another chunk to the United Auto Workers. But new GM also inherited the accumulated net operating losses that would have turned into a pumpkin in normal bankruptcy.

Editorial board member Joe Rago on President Obama's speech today to the United Auto Workers..In a 2011 working paper, J. Mark Ramseyer of Harvard and Eric Rasmusen of Indiana University argue that by manipulating corporate tax rules by fiat, "Treasury gave the firm (and its owners, including the UAW) $18 billion more in assets." Thus a Democratic Administration gave "a massive tax benefit to one of the party's biggest supporters." The other problem is that the move put Ford and GM's other competitors at a disadvantage, as bailouts always do.

Mitt Romney recently argued that campaign rival Rick Santorum was responsible for ObamaCare because the former Pennsylvania Senator had, years before its passage, supported Arlen Specter, his homestate colleague and one of the 60 Senators who later voted for the bill. Mr. Romney's Massachusetts creation of the prototype for President Obama's signature law appears to be the greater sin against free health-care markets. But after March 15, even Mr. Romney may agree that the blame for the 60th vote really belongs to the U.S. Justice Department.

That's the day a federal court has ordered the release of an independent report on Justice's "systematic concealment" of evidence. Specifically, the report ordered by Judge Emmet Sullivan found that federal attorneys prosecuting the late Senator Ted Stevens of Alaska hid "significant exculpatory evidence which would have independently corroborated [his] defense and his testimony, and seriously damaged the testimony and credibility of the government's key witness."

That much we know from sections of the report already made public, but several of the offending prosecutors have been trying to prevent the release of the full 500 pages chronicling the extent of their misconduct. Judge Sullivan recently and to his great credit denied their requests and so Americans will see the panorama of abuse.

These prosecutors, working in Justice's ironically named Public Integrity Section, trampled on Stevens's rights by ignoring the Brady rule, which requires prosecutors to share exculpatory evidence with the defense. The feds then won a conviction on ethics charges less than two weeks before Election Day in 2008.

Stevens, a Republican who had been highly popular in Alaska prior to the prosecution, lost a close race to Democratic challenger Mark Begich. Mr. Begich went on to become, yes, one of the 60 Senate votes for ObamaCare in 2009.

Within months of the election, as the federal abuses came to light, Stevens' conviction was set aside. But the election result, highly influenced by the bogus conviction, never was. As Judge Sullivan recently noted in explaining all the reasons that the report should be made public, the Stevens loss "tipped the balance of power in the United States Senate." And in favor of ObamaCare.

Eric Holder has gone all-in supporting race-based hiring preferences and race-based benefits. Given that the majority of Americans despise this rot, surely the presidential candidates will pounce.

In a little noticed interview at the “World Leaders Forum,” Holder makes statements that should be the subject of a direct mail piece in Pennsylvania, Ohio, Wisconsin, and Virginia:

Holder expressed support for affirmative action, saying that he “can’t actually imagine a time in which the need for more diversity would ever cease.”

“Affirmative action has been an issue since segregation practices,” Holder said. “The question is not when does it end, but when does it begin. … When do people of color truly get the benefits to which they are entitled?”

Let me repeat: When do people of color truly get the benefits to which they are entitled? Again, the benefits to which they are entitled.

Ponder a moment the layers of rubbish in this philosophy.

Some are surprised by Holder’s brazenness. I am not. As I like to say, I wrote a bestseller about Holder’s racialist DOJ. Nothing surprises me anymore. The only surprise is the dumbfounded, stuck, GOP response — which would be none.

If the GOP nominee does not make this a presidential campaign issue because he is afraid to talk about such unpleasantries, then shame on him. In tough economic times, the last thing middle America wants to hear is the attorney general grousing about people of color getting benefits because of their color.

The Obama administration obviously exercises no restraint on racial issues, or perhaps has the courage of their convictions. What price is paid for this racial radicalism? None.

Instead, we have a whole assortment of Republicans, inside the government (oh and I could name so many names), afraid to pound Obama for this. Let’s hope they come out of their shells and fight.

Obama has paid no price for this rotted, unfair, and un-American employment philosophy, and continued GOP silence will preserve this peace.

The Attorney General of the United States has again abdicated his duties; he has notified Congress that he will not defend a duly enacted law in the courts. He did this in February of last year, too, when he stepped back from upholding the federal Defense of Marriage Act. This time, he refuses to defend a military and veterans' benefits law, 31 U.S.C. §§ 101(3) & (31), that defines “surviving spouse” and “spouse” to refer to persons of the opposite sex.

The Attorney General is not doing this on his own; he specifically says the notification reflects the policy of the President.

I wrote last year that this policy is a mixed blessing, in that by abdicating his responsibilities, Mr Holder may open the door to a more vigorous and more effective defense of the laws in the courts. The same holds true this year. But I am concerned with a more fundamental problem, and that is how this Administration and like-minded state officials flout the legislatures in our country.

In recent years, chief executives of the states and the federal government appear to have abandoned the very concept of representative governance by their legislatures in favor of rule by decree. They have adopted an attitude that if they are right in their policies—and they always believe that they are--then they will forge ahead with them no matter if they receive the authorization of the legislature or not. They will even forge ahead if instructed otherwise by their legislatures.

This concern goes beyond the problem of delegation-of-legislative-power-run-wild that was described on MercatorNet recently by Angelo M. Codevilla. Here are a few examples, culled from hundreds that could be cited.

Illinois. In 1997, Illinois enacted the Health Care Right of Conscience Act, providing perhaps the broadest protection of health-care conscience rights of any jurisdiction in the United States. Nevertheless, in 2005, the then-Governor of Illinois ordered his Administration to promulgate a regulation forcing pharmacists to sell contraceptive and abortifacient drugs or face disciplinary proceedings. A member of the Governor's cabinet wrote a letter to a Chicago newspaper stating, “We are telling pharmacies... they can't let an individual pharmacist's personal beliefs delay or hinder a woman's ability to have her prescription for birth control filled...” After six years of litigating against the State of Illinois, pharmacists finally won a permanent injunction in the trial court. Incredibly, the Attorney General of Illinois has appealed.

Missouri. In Missouri, a 2011 statute on funding certain bio-science research and start-ups, which Missouri Right to Life pointed out could allow funding of embryonic stem-cell research, was enacted with a clause that it would not go into effect unless another specific bill was enacted during the same session. The other bill was not enacted. Nevertheless, the Governor of Missouri announced that he would implement the bio-science funding program anyway, despite the clear language of the statute that it was not to go into effect. A judge recently issued a permanent injunction against the Governor. Incredibly, the Attorney General of Missouri has announced he will appeal.

Federal Government. On December 19, 2011, the President of the United States issued an Executive Order instituting a “National Action Plan on Women, Peace, and Security.” This Plan describes how the United States will put more women into diplomatic and other official efforts to avoid wars, to bring a woman's point of view to efforts to maintain peace, and to ensure women are not forgotten in ameliorating the suffering and damage caused by armed conflicts. Of course, “reproductive health,” which for this Administration in particular means abortion services, is not forgotten, either. The Plan proudly announces at one point, “We have supported the development of a toolkit on reproductive health in emergencies, and training modules for NGOs on the prevention of sexual exploitation and abuse (SEA) of beneficiaries.” No US law enacted by Congress is cited as authority for this “toolkit” or the Plan as a whole; the Plan is based, it says, on UN Security Council Resolutions beginning in the year 2000.

4. In the fall of 2011, the President initiated several Executive Branch initiatives under the rubric, “We Can't Wait.” Explicitly admitting that Congress refused to enact such programs, the President announced that he and his Administration would initiate them, anyway. Such programs include “energy upgrades” to commercial buildings toward which the sum of $2 billion of taxpayer money is committed, a commitment of another $1 billionof the public's money toward the financing of start-up companies, and expanded federal spending in rural areas, particularly expanding the “rural health information technology workforce.” It seems not to bother the President that the people's representatives have not approved spending the people's money for these initiatives and that the federal government is currently gushing out torrents of borrowed money that it does not have any idea how to repay.

These examples illustrate how the governors and the President are flouting the will of their legislatures, whether the legislative intent is expressed in enacting bills or in refusing to enact bills. The President's Attorney-General refuses to defend laws that Congress enacted, and the President initiates programs that Congress refuses to enact. Governors issue Executive Orders that contradict the terms of statutes of their state legislatures.

I learned in school that the executive branch of government can propose new programs, but it is for the legislative branch to enact them, and then the executive enforces the laws enacted by the legislature. As an adult, my examination of the Constitution of my home state, Missouri, and the Constitution of the United States reinforces what I learned in school. The last couple of decades indicate that the governors and President are not abiding by this arrangement. Who has authorized them to arrogate legislative powers to themselves?

Perhaps Americans ought to refresh our memories about the principles we have inherited from the Founders of our country. Times have changed since they strove for our independence and freedom, but human nature has not. It is to the Founders' insights into human nature, and the mechanisms of limited government that they created with human nature in mind, that we owe the freedoms we enjoy more than 200 years later.

It was profitable to begin my own review with American Cicero, Bradley J. Birzer's 2010 biography of Charles Carroll, signer of the Declaration of Independence. As a Catholic, Carroll was actually disqualified before the Revolution from citizenship in his home province, Maryland. He could not vote or hold public office. Nevertheless, he contributed what he could, beginning with written public newspaper columns against abuses of the provincial governor. What were those abuses? They began with issuance of a gubernatorial decree that imposed public fees after the Maryland Assembly refused to enact them.

Among the principles that Carroll invoked against the governor's decree was this one: “Fees are taxes [and] taxes cannot be laid out but by the legislature.” Carroll further wrote, “The pursuits of government in the enlargement of its powers, and its encroachments on liberty, are steady, patient, uniform, and gradual.” His campaign against unauthorized executive decrees made Carroll famous throughout the colonies and helped launch the cause of independence in Maryland.

Maryland was not unique. The royal governors' flouting of the people's legislatures was prominent among the reasons our colonial ancestors finally rose up against the British. In the Declaration of Independence, the recitation of grievances that justified severance of allegiance to Great Britain included the following:

He [the King] has refused to pass other Laws for the Accommodation of large Districts of People, unless those People would relinquish the Right of Representation in the Legislature, a Right inestimable to them, and formidable to Tyrants only. * * *

He has kept among us, in Times of Peace, Standing Armies, without the consent of our Legislatures. * * *

For suspending our own Legislatures, and declaring themselves invested with Power to legislate for us in all Cases whatsoever.

The current Attorney General's refusal to uphold the enactments of Congress is bad news for the rule of law in a republic. The expanding practice of governors and presidents to rule by royal decrees that we now call “executive orders,” sometimes even flouting contrary acts of their legislatures, is nothing else than the groundwork for a virtual dictatorship.

Unlike the colonists of 1776, we have elections available to cut this process short. “A Prince,” said our Declaration of Independence, “whose Character is thus marked by every act which may define a Tyrant, is unfit to be the Ruler of a free People.” So is such a state governor, and so is such a President.

James S. Cole graduated from Harvard Law School in 1978 and practices law in St. Louis, Missouri.

By Kevin D. WilliamsonMay 3, 2012 2:15 P.M. Comments 155Alas, Team Obama has omitted a few milestones from the life of Julia:

4 months: Julia’s mother decides that giving birth will be hard on her figure. She kills Julia. Under Barack Obama, her right to do so is absolutely nonnegotiable.

10 years: Trapped in a failing and dangerous public school, Julia (another Julia, not the dead one) is terrified and miserable. Under the Obama administration, protecting the government education monopoly from competition and accountability is almost as sacrosanct as abortion. School-choice programs are severely constrained or eliminated. Julia falls behind.

21 years: After barely completing her high-school degree in her god-awful school, Julia goes looking for a job. There aren’t many, especially for people without college degrees. Julia kicks around the food-service and hospitality industries for a while, and ends up getting a job as a bartender. Even at her relatively low level of income, she pays a host of direct and indirect taxes to help subsidize Obama donors and supporters at politically connected businesses. She can’t quite figure out why President Obama’s pet millionaires and billionaires need her money more than she does.

22 years: After working in the bar for a while, Julia decides she likes it and wants to open her own place. But she’ll need capital to get that done. Under Obama, there is little or no credit available to small entrepreneurs, because we never got around to fixing the problems in the banking system, instead choosing to futz around with things like the disclosures on credit-card offers and micromanaging swipe fees and grandstanding about bonuses. Julia does not open her new business, and she doesn’t hire any other Julias to build, decorate, supply, or staff it.

23 years: Being a bartender, Julia works late at night. Under Obama, the federal government supports laws that make it difficult or impossible for a private citizen to own a gun in many places. Leaving her bar one night, the defenseless Julia is killed in the street. Ironically, the gun used to kill her was sold to a Mexican drug cartel under a program run by President Obama’s Department of Justice.

57 years: Julia (different Julia, not one of the dead ones) has been paying very high taxes for most of her life, mainly to support three federal programs: Social Security, Medicare, and Medicaid. In fact, the payroll tax diverts about 12 percent of her income — income she might have saved — into the entitlements. Under President Obama, stubborn refusal to reform these unsustainable entitlements means that the programs have to be radically cut or entirely eliminated, and Julia and her whole generation get hosed in spite of the fact that they have been taxed for decades under the phony promise that they were “paying into” the programs. The only alternative to massive cuts was an 88 percent increase in all federal taxes, which already have been rising to offset costs from Obamacare, which were wildly underestimated.

88 years: Julia (different Julia) passes away in 2022. And she got out just in time: Policies adopted by the Obama administration sent the national debt to $71,000 per person and climbing.

Brief • May 7, 2012 The Foundation"Of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people, commencing demagogues and ending tyrants." --Alexander HamiltonGovernment

Obama's 'The Life of Julia'"Barack Obama has a new composite girlfriend, and her name is Julia. Her story is told in an interactive feature titled 'The Life of Julia' on the Obama campaign website. ... As a toddler, she's in a head-start program. Skip ahead to 17, and she's enrolled at a Race to the Top high school. Her 20s are very active: She gets surgery and free birth control through ObamaCare regulations, files a lawsuit under the Lilly Ledbetter Fair Pay Act, and pays off her student loans at a low interest rate. We get updates at age 31, 37 and 42 -- and then the narrative skips ahead 23 years when she enrolls in Medicare. Two years later, she's on Social Security, at which point she can die at any time. ... [N]othing happens to Julia between 42 and 65. That period includes the typical peak earning years -- the time at which, assuming Julia is gainfully employed, she will be paying the biggest price for 'Obama's' generosity. ... The most shocking bit of the Obama story is that Julia apparently never marries. She simply 'decides' to have a baby, and Obama uses other people's money to help her take care of it. ... In 1999 Lionel Tiger coined the word 'bureaugamy' to refer to the relationship between officially impoverished mothers of illegitimate children and the government. 'The Life of Julia' is an insidious attack on the institution of the family, an endorsement of bureaugamy even for middle-class women." --Wall Street Journal columnist James Taranto"Alas, Team Obama has omitted a few milestones from the life of Julia." --National Review's Kevin D. Williamson, who has them covered here.

Here's what happens when the president of the United States publicly targets a private citizen for the crime of supporting his opponent.

Frank VanderSloot is the CEO of Melaleuca Inc. The 63-year-old has run that wellness-products company for 26 years out of tiny Idaho Falls, Idaho. Last August, Mr. VanderSloot gave $1 million to Restore Our Future, the Super PAC that supports Mitt Romney.

Three weeks ago, an Obama campaign website, "Keeping GOP Honest," took the extraordinary step of publicly naming and assailing eight private citizens backing Mr. Romney. Titled "Behind the curtain: a brief history of Romney's donors," the post accused the eight of being "wealthy individuals with less-than-reputable records." Mr. VanderSloot was one of the eight, smeared particularly as being "litigious, combative and a bitter foe of the gay rights movement."

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CloseAssociated Press .About a week after that post, a man named Michael Wolf contacted the Bonneville County Courthouse in Idaho Falls in search of court records regarding Mr. VanderSloot. Specifically, Mr. Wolf wanted all the documents dealing with Mr. VanderSloot's divorces, as well as a case involving a dispute with a former Melaleuca employee.

Mr. Wolf sent a fax to the clerk's office—which I have obtained—listing four cases he was after. He would later send a second fax, asking for three further court cases dealing with either Melaleuca or Mr. VanderSloot. Mr. Wolf listed only his name and a private cellphone number.

Some digging revealed that Mr. Wolf was, until a few months ago, a law clerk on the Democratic side of the Senate Permanent Subcommittee on Investigations. He's found new work. The ID written out at the top of his faxes identified them as coming from "Glenn Simpson." That's the name of a former Wall Street Journal reporter who in 2009 founded a D.C. company that performs private investigative work.

The website for that company, Fusion GPS, describes itself as providing "strategic intelligence," with expertise in areas like "politics." That's a polite way of saying "opposition research."

When I called Fusion's main number and asked to speak to Michael Wolf, a man said Mr. Wolf wasn't in the office that day but he'd be in this coming Monday. When I reached Mr. Wolf on his private cell, he confirmed he had until recently worked at the Senate.

When I asked what his interest was in Mr. VanderSloot's divorce records, he hesitated, then said he didn't want to talk about that. When I asked what his relationship was with Fusion, he hesitated again and said he had "no comment." "It's a legal thing," he added.

Fusion dodged my calls, so I couldn't ask who was paying it to troll through Mr. VanderSloot's divorce records. Mr. Simpson finally sent an email stating: "Frank VanderSloot is a figure of interest in the debate over civil rights for gay Americans. As his own record on gay issues amply demonstrates, he is a legitimate subject of public records research into his lengthy history of legal disputes."

Related Video Columnist Kim Strassel on President Obama's enemies list. Photo: Associated Press..A look through Federal Election Commission records did not show any payments to Fusion or Mr. Wolf from political players, such as the Democratic National Committee, the Obama campaign, or liberal Super PACs. Then again, when political groups want to hire researchers, it is not uncommon to hire a less controversial third party, which then hires the researchers.

This is not the first attack on Mr. VanderSloot. While the executive has been a force in Idaho politics and has helped Mr. Romney raise money, he's not what most would consider a national political power player. Through 2011, nearly every mention of Mr. VanderSloot appeared in Idaho or Washington state newspapers, often in reference to his business.

That changed in January, with the first Super PAC disclosures. Liberal bloggers and media have since dug into his past, dredging up long-ago Idaho controversies that touched on gay issues. His detractors have spiraled these into accusations that Mr. VanderSloot is a "gay bashing thug." He's become a national political focus of attention, aided by the likes of partisan Salon blogger Glenn Greenwald and MSNBC host Rachel Maddow. Bloggers have harassed his children, visiting their social media accounts and asking for interviews and information.

Mr. VanderSloot has said his attackers have misconstrued facts and made false allegations. In February he wrote a long reply, publicly stating that he has "many gay friends whom I love and respect" who should "have the same freedoms and rights as any other individual." The Obama campaign's response, in April, was to single out Mr. VanderSloot and repeat the slurs.

Political donations don't come with a right to privacy, and Mr. VanderSloot might have expected a spotlight. Then again, President Obama, in the wake of the Gabby Giffords shooting, gave a national address calling for "civility" in politics. Yet rather than condemn those demeaning his opponent's donors, Mr. Obama—the nation's most powerful man—instead publicly named individuals, egging on the attacks. What has followed is the slimy trolling into a citizen's private life.

Mr. VanderSloot acknowledges that "when I first learned that President Obama's campaign had singled me out on his 'enemies list,' I knew it was like taping a target on my back." But the more he's thought it through, "the public beatings and false accusations that followed are no deterrent. These tactics will not work in America." He's even "contemplating a second donation."

Still. If details about Mr. VanderSloot's life become public, and if this hurts his business or those who work for him, Mr. Obama will bear responsibility. This is what happens when the president makes a list.

Dodd-Frank's Too-Big-to-Fail Dystopia The government expands crony capitalism to insurers, securities firms and other non-banks. By PETER J. WALLISON

With the recent publication of its final rule, the federal government's Financial Stability Oversight Council is now in position to designate certain nonbank firms as "systemically important financial institutions" (SIFIs). Under the Dodd-Frank Act, that label can be attached to nonbank financial institutions—insurers, financial holding companies, hedge funds, finance companies, securities firms, perhaps even money-market mutual funds and private-equity firms—that will "pose a threat to the financial stability of the United States" if they fail.

This process has received relatively little attention in the media, but there is probably no aspect of the Dodd-Frank Act that will have more damaging effects on competition in the U.S. financial system.

Almost daily, we hear politicians and commentators complaining that large banks like J.P. Morgan Chase are too big to fail and put the taxpayers at risk. But few seem to recognize that the Oversight Council's designations will spread the too-big-to fail problem beyond banking to every other financial industry.

The capital markets are not populated by fools. When the council has declared that a firm is "systemically important"—that its failure poses a threat to U.S. financial stability—the U.S. government is effectively saying that it will do whatever it takes to prevent the firm from failing. This means that a loan to a "systemically important" institution is going to be safer than a loan to a smaller competitor without that designation.

This is not speculation. The banking industry is already made up of a host of smaller banks and a few huge banks that are widely considered too big to fail—and the biggest banks have a lower cost of funds than their small competitors, as Thomas Hoenig (then of the Kansas City Federal Reserve Bank, now of the Federal Deposit Insurance Corporation) and others have shown. Fannie Mae and Freddie Mac, thanks to their government backing, also had advantageous funding, so much so that they drove even the biggest banks from much of mortgage market.

In testimony last week to a House subcommittee, MetLife executive William Wheeler put it clearly: "A SIFI designation would be the federal government's signal that we are indeed 'too big to fail,' and that if we got into financial trouble, federal funds would be used to rescue the firm. The implicit backing of the federal government could strengthen perceptions of our creditworthiness and may give us a significantly cheaper cost of funds than our peers."

It's not difficult to imagine what would happen to competition in the U.S. after SIFIs are designated in nonbank financial industries. These industries would consolidate, with larger companies using their funding advantage to absorb the smaller.

Defenders of the SIFI designation say it will do no harm. All such institutions will be turned over to the Federal Reserve for "stringent" regulation, they argue, and this will be so costly that any funding advantage will be overcome. That certainly hasn't happened in the Fed's regulation of the biggest banks, but even if it does happen in the case of SIFIs it wouldn't be much consolation.

Logic says that one of two things is likely to be true: Either the funding benefits realized by SIFIs will be larger than the regulatory costs, or the regulatory costs will overwhelm the funding advantages. The chance that they will balance out is negligible.

Either we will have large, successful, government-backed firms that swallow up smaller competitors, or we will have large, unprofitable, heavily regulated giants that are gradually driven to failure by their more nimble and less regulated competitors. In the former case, small firms are the victims. in the latter case, taxpayers will pay for the bailouts. Pick your dystopia.

One of the most surprising things about the SIFI designation process is how little attention it's received from smaller firms. They seem to think that this is a potential problem only for the firms that are in danger of being labeled systemically important. But both the big and the small could have a major stake in what the government's Oversight Council ultimately does, and their Washington representatives should be saying so to Congress.

Crony capitalists and their government mentors will be the biggest winners. Concentrated and heavily regulated markets are fine with supporters of the Dodd-Frank Act. They are comfortable with a financial industry made up of a few large firms responsive to government direction. If the government's SIFI designation is allowed to continue, that's precisely what we'll get.

Without crony capitalism and too big to fail would there even be a venue (Bank of America Stadium, Charlotte, NC) large enough to bring the big government people together with the Occupy Wall Street people for the 2012 Obama Acceptance Speech: We all gather here today in the unified fight against big business and big money, now a word from our sponsor, lol.

In Sunday’s New York Daily News, I deplore [1] the efforts of politicians and regulators to drag successful companies into the parasite economy of Washington, the most recent example being Apple. As the article says,

Heard of “too big to fail”? Well, to Washington, Apple is now too big not to nail.

I was prompted to these reflections by a recent article [2] in Politico. The Wall Street Journal used to call itself “the daily diary of the American dream.” Politico is the daily diary of the rent-seeking class. And that class is very upset with Apple for not hiring many lobbyists, as illustrated by Politico‘s front-page cartoon:

The story [2] begins:

Apple is taking a bruising in Washington, and insiders say there’s a reason: It’s the one place in the world where the company hasn’t built its brand.

In the first three months of this year, Google and Microsoft spent a little more than $7 million on lobbying and related federal activities combined. Apple spent $500,000 — even less than it spent the year before.

The nerve of them! How do they expect lobbyists to feed their families? Then comes my favorite part:

The company’s attitude toward D.C. — described by critics as “don’t bother us” — has left it without many inside-the-Beltway friends.

“Don’t bother us”—yes! Don’t tread on me. Laissez nous faire. Leave us alone. Just let us sit out here in Silicon Valley, inventing cool stuff and distributing it to the world. We won’t bother you. Just don’t bother us.

But no pot of money can be left unbothered by the regulators and rent-seekers.

Apple is mostly on its own when the Justice Department goes after it on e-books, when members of Congress attack it over its overseas tax avoidance or when an alphabet soup of regulators examine its business practices.

And what does the ruling class say to productive people who try to just avoid politics and make stuff? Nice little company ya got there, shame if anything happened to it:

“I never once had a meeting with anybody representing Apple,” said Jeff Miller, who served as a senior aide on the Senate Judiciary Committee’s Antitrust Subcommittee for eight years. “There have been other tech companies who chose not to engage in Washington, and for the most part that strategy did not benefit them.”

As I noted in the Daily News, back in 1998 Microsoft was in the same situation—a successful company on the West Coast, happily ignoring politics, getting too rich for politics to ignore it—and a congressional aide told Fortune‘s Jeff Birnbaum, “They don’t want to play the D.C. game, that’s clear, and they’ve gotten away with it so far. The problem is, in the long run they won’t be able to.” All too true.

Watch out, aspiring entrepreneurs. You too could become too big not to nail.